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Standardized Network APIs to Drive Substantial Recurring Revenues for Enterprises, Analysts Say

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In Short:

A new joint venture led by Ericsson and 12 telecom companies, including India’s Reliance Jio and Bharti Airtel, aims to standardize network APIs. This simplification could help businesses save costs, improve customer experiences, and unlock billions in recurring revenue. Analysts predict the network API market could generate $100 billion to $300 billion in revenue over the next 5-7 years.


Telecom APIs Set to Drive Revenue Growth

The simplification and standardization of APIs across various telecom providers have the potential to unlock significant recurring revenue for enterprises. This transformation is expected to streamline integration processes, reduce operational costs, and enable faster market entry, as highlighted by analysts.

Neil Shah, Vice President at Counterpoint Research, emphasized that “this will unlock billions of dollars in recurring revenue for enterprises based on usage, SLAs, and convenience, which can enhance operational efficiency and catalyze services built upon network capabilities.”

Joint Venture for Network APIs

On Thursday, global telecom equipment leader Ericsson announced a joint venture with 12 telecom providers, including India’s Reliance Jio and Bharti Airtel. This initiative aims to market network application programming interfaces (APIs) globally to foster innovation in digital services.

According to an executive from one of the telecom companies, this partnership will empower enterprises to offer new services, enhance customer experiences, and monetize telecom data and services more efficiently.

The new joint venture is designed to enable businesses to deploy network APIs that can operate across multiple countries and telecom networks, akin to international mobile roaming.

Opportunities in 5G Networks

As 5G architecture evolves towards software-defined, cloud-based, and programmable networks, it opens up vast opportunities for enterprises in various sectors to develop applications and services that leverage advanced network capabilities.

While APIs facilitate access to these capabilities, the processes of integration and monetization can be optimized through standardization efforts. Shah indicated, “A unified API structure allows businesses to scale globally, access a broader range of services, and innovate more efficiently, which enhances operational effectiveness. This reduces the complexity associated with managing multiple telecom systems and unveils opportunities for new service offerings and improved customer experiences, ultimately driving substantial financial benefits.”

The use cases arising from this advancement span security, low-latency applications, SLA-driven streaming, and broadcasting, among others.

Market Potential

This global platform will provide millions of developers with a single point of access, allowing the telecom sector to deepen its investment in the network API landscape, thus driving growth and innovation,” stated Börje Ekholm, President and CEO of Ericsson, during the announcement of the joint venture.

According to estimates by McKinsey, the network API market is projected to unlock between $100 billion and $300 billion in connectivity and edge-computing-related revenue for operators over the next 5-7 years, while generating an additional $10 billion to $30 billion from APIs themselves.

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